CSR Says Zoran Accepts Lower Offer in Revised Merger Terms

Zoran shareholders will receive $6.26 in cash and 0.589
ordinary share of CSR in American Depositary Shares for each
Zoran common shares, Cambridge, England-based CSR said in a
statement on the Regulatory News Service today. The transaction
values Zoran at $9.19 per share or about $484 million, down from
$679 million when an all-stock deal was announced on Feb. 21.

CSR lowered its bid after Zoran reported a larger-than-
expected loss last month and Cisco Systems Inc’s said it would
exit its Flip digital video camera product line. The Flip
accounted for about $10 million of Sunnyvale, California-based
Zoran’s digital-camera revenue each quarter, according to an
estimate by Lazard Capital Markets LLC.

Zoran, which makes chips for digital audio and video
products, in May reported a first-quarter loss of 43 cents a
share, missing the average analyst estimate, according to
Bloomberg data. CSR said at the time it would consider the
implications of Zoran’s earnings statement.

Net of Zoran’s cash balance of $251 million as of March 31,
2011, today’s transaction value implies an enterprise value of
$233 million, the statement said. That is down from $418
million. CSR rose 0.6 percent to 309.9 pence, valuing the
company at 529 million pounds ($851 million).

Zoran shareholders will own approximately 16.5 percent of
the combined group on a fully diluted basis as of 16 June 2011
when the deal is done, according to the statement. CSR won’t
proceed with its on-market share buyback program announced on
Feb. 21, the company said.

“The CSR transaction is in the best interests of Zoran and
its stockholders, the Zoran Board considered other potential
cash and stock merger partners, as well as Zoran’s standalone
options,” said Levy Gerzberg, Zoran co-founder and CEO.